The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1887-03-23

Pacific Commercial Advertiser
THE HAWAIIAN LOAN.

Elsewhere we publish a long letter
from Mr. A Hoffnung, Hawaiian Charge
d'Afaires, London, on the floating OF
the Government loan. Our space does
not admit of heightened comments upon
this letter, but we cannot refrain from
saying that as we understand the mat
ter the Hawaiian Government will not
get 1913 for every 500 bond, minus 5 per
cent syndicate commission for floating
the loan Mr.. Hoffnung writes under
the impression that such will be the
case. We are sufficiently well advised
on the subject, however, to say that this
is an error on his part. But the law
calls for 1913 to be deposited in the Ha-
waiian Treasury for every 500 bond
issued. The commission is to be paid
by the Treasury, and not to be deducted
by Financial agents in London or else
where. Section of the Loan Act as
amended reads:
Section 3. Said bonds shall be signed
by the Minister of Finance and by the
Registrar of Public Accounts and be
sealed by the seal of the Department of
the Minister of Finance and shall not be
issued at less than at the rate of ninety
eight per centum of their nominal par
value in gold coin of the United States of
the present standard or its equivalent, eX-
cept that the Minister of Finance with the
approval of the King i'll Cabinet Council
may allow to any person or syndicate
which may negotiate the sale of said bonds
a commission not exceeding five per cent
of the first issued portion of the loan, to-
wit, for 81 900 900, and such percentage as
may be found necessary upon further
issues, but not to exceed five per cent upon
such further issues.
Now, million-and-a-half of the loan
has been issued, and the question is how
much of it has reached the Hawaiian
Treasury in United States gold coin or
its equivalent. The provisions of the
law are net ambiguous. Have these
been complied with by the London syn
dictate, which placed one million dollars
on the London market on such favora-
BILE terms, as Mr.. HOffnung writes? If
not, what is the reason? 1t will be
found, we think, that the actual cost of
floating that portion of the loan already
issued will be far in excess OF per cent
indeed, the ascertained charges at
the present time on the amount
already hoated considerably exceed the
legal limit Unless the remaining half
million, therefore, is sold at very high
premium on Government account, there
L Il ho to
be made up in some way.
Mr. Hoffnung has cited the cost OF
other loans in London, and argues there
from that the Hawaiian loan has been
great success. But there is no parallel
to be drawn between the Hawaiian loan
and the examples cited. He has gone
out into the by-ways and hedges, and
called in the halt, the manned and the
blind of nations, and set them up as the
superiors of Hawaii, which is naturally
one of the richest as it is one of the most
solvent countries in the world. Why
did he not select the colony of Victoria,
a small country overburdened with debt,
having population of less than mill
ion of people, which f1oated 4 per cent !
loan in London for SIC, 0OO,0 900 about the /
same time as the Hawaiian loan was put !
upon the market, and which Melted |
some $130, 900 premium after paying all |
costs and charges. Despite what Mr.,
Hoffnung says, therefore, we regard the |
Hawaiian loan as the least satisfactory |
financial operation of the kind, so far as
the Hawaiian Government is concerned,
that has been attempted in London
of late years upon anything like such
unexceptionally good security.